Charles HudsonFounder and Managing Partner, Precursor Ventures

Are software economics heading for a cliff with AI?

5 Sept 2025 · 0 min

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Short excerpt from a YouTube video by Charles Hudson arguing that developer compute consumption (tokens/compute bills) may outpace developer wages as AI is used more, leading to cases where a single developer incurs compute costs larger than their salary. Example given: a developer paid $250,000 generating a $500,000 compute bill while producing the output previously requiring ~10 people.

The one thing he said that I do think is definitely going to happen is that you're going to have developers who will end up spending more in tokens than they're paid in salary. Like their. Their compute consumption will exceed their. Because I think their compute consumption will grow faster than their wages. So at some point, those two lines will. Those two lines will cross. And I think that will be interesting when you have a person who's paid, let's say, $250,000 a year, who's generating a $500,000 compute bill, but that person might be doing the work of what would have previously taken 10 people.